Gartner Raises 2014 Chip Market Growth Forecast

The global chip market will be worth $336 billion in 2014, up 6.7 percent from 2013, according to market analysis company Gartner Inc. This is higher than the forecast of 5.4 percent growth Gartner gave three months before.

The sequential growth of the second quarter of 2014 is outpacing previous expectations Gartner said.

"2014 semiconductor growth is widespread across many chip types and applications," said Bryan Lewis, research vice president at Gartner, in a statement. "DRAM is once again expected to lead in 2014 with 18.8 percent annual growth, but other areas are also doing well, including analog, FPGAs, ASICs, and non-optical sensors. ASICs are driven by Apple, with strong sales of its iPhone expected in the second half of 2014. ASICs will also benefit from the strong ramp of the latest video game console generation, particularly the Sony PS4 and Microsoft Xbox One. Overall semiconductor growth is widespread, with the non-memory segment growing 5.2 percent in 2014, compared with only 0.8 percent in 2013."

"Smartphones and ultramobile devices, including tablets, are the growth areas from a system point of view," said Ranjit Atwal, research director at Gartner.

"Traditional desk-based PCs and notebook units are continuing to decline 6.7 percent in 2014. Total production unit growth for ultramobile devices, including tablets, is expected to rise over 30 percent in 2014. Low-cost utility tablets (white box) continue to drive new growth in the tablet market."

DRAM pricing remains firm, and this, coupled with growth in key system markets, is helping propel the DRAM market to exceed $41 billion in 2014. Memory is a feast-and-famine market due to big supply and demand cycles, and Gartner predicts the next big memory oversupply downturn to hit in 2016, weakening overall semiconductor growth in that year.

Hi Peter - per the subject the Cowan LRA forecasting model is predicting sales and sales growth numbers for 2014 of $335.8 billion and 9.9 percent, respectively. These latest forecast numbers are derived from the WSTS's recently posted May 2014's HBR which reported May's actual global semi sales of $26.9 billion. This monthly update for 2014's sales growth, gleaned from the latest Cowan LRA model run, projects a much higher sales growth number than Dataquest's just updated expectation of 6.7% even though the two sales predictions at $336 biullion match almost perfectly. The difference in the two resulting sales growth results reflect the higher 2013 sales base (at $315 billion) attribuable to Dataquest versus the WSTS 2013 final sales result of $305.5 billion